Seoul: South Korean exports extended their losing streak to a seventh straight month in July, pointing to little respite in sight for Asia’s trade-reliant economies as Chinese demand cools and global commodity prices take a fresh tumble.
Exports fell 3.3 per cent on-year to $46.61 billion (Dh171.2 billion) in July while imports slumped 15.3 per cent to $38.85 billion, generating a trade surplus of $7.76 billion in July, trade ministry data showed on Saturday.
It was slightly better than a median 5 per cent drop forecast in a Reuters survey but still worse than a 2.4 per cent fall in June. Shipments to China and the European Union fell and growth tailed off in exports to the United States.
The trade ministry said in a statement that exports in volume terms rose sharply in July for a second straight month over a year earlier in a rare bright sign, but analysts said the global environment was still getting worse.
“China is going through a turbulent period both on the financial markets and in economic growth, and the recent fall in commodities prices will cut demand from commodities-rich countries,” said Park Sang-hyun, chief economist at HI Investment & Securities.
An official survey in China on Saturday showed growth in its vast manufacturing sector unexpectedly stalled in July as firms’ domestic and export orders weakened.
China is South Korea’s biggest export market, taking around one-quarter of its shipments abroad. South Korean exports to China fell 6.4 per cent in July from a year earlier, the sharpest decline in five months.
The Thomson Reuters/CRB commodity index fell 10.8 per cent in July on concerns about the outlook for the Chinese and global economies, marking the worst monthly drop since September 2011.
South Korea is the first major exporting economy to report monthly trade data and is home to global suppliers such as Samsung Electronics, Hyundai Motor and Hyundai Heavy Industries.
Samsung Electronics on Thursday offered a downbeat outlook for the second half of the year as smartphone market growth slows and ahead of the expected release of new iPhones from arch rival Apple Inc.
The average export value per working day was $1.86 billion in July, less than a revised $1.94 billion in June, Reuters calculations showed.
Asia’s fourth-largest economy expanded just 0.3 per cent in the second quarter, data showed in late July. The government aims for over 1 per cent growth in the following quarters this year, but analysts say it will be tough for growth to pick up at a rapid pace.
Other Asian export economies are also suffering from China’s slowdown. Data on Friday showed Taiwan’s economic growth slowed more sharply than expected to a three-year low in the second quarter, hurt by a slump in demand for its hi-tech products.
